Cordlife sets aside S$500,000 for enhanced compensation package to affected customers
In a regulatory filing on its financial results for the first half of 2025, the private cord blood bank said late on Thursday (Aug 14) that the compensation package formed part of several one-off costs recorded for the first six months of the year.
Cordlife added that it had also incurred S$200,000 in costs related to the testing of more than 200 samples of cord blood units (CBU) from five storage tanks deemed by the Ministry of Health (MOH) to be at "low risk" of being adversely affected.
The company agreed to the testing in April 2024, which it said would take approximately a year to complete, before reviewing the results with MOH experts.
In an update on Thursday, Cordlife said the "comprehensive and independent" review is expected to be completed in or around the later part of 2025.
As part of the enhanced package, announced on Jul 10, affected customers will have their existing cord blood storage period extended - at no additional cost - until their child turns 26.
The package was announced after Cordlife held a series of online and in-person townhalls in late June to engage with affected customers.
It has since expanded the warranty clause to cover more situations.
If the stored cord blood unit is needed by the donor or a biological sibling (and it is a suitable match) but cannot be used for an approved stem cell transplant because it does not meet the required quality standards - and if the company also cannot find a suitable replacement cord blood unit - it will pay the affected customer S$50,000.
In June, Cordlife said in a regulatory filing that around 56 per cent of affected Cordlife customers had accepted refund offers made by the company.
The offers comprised a refund of the annual fees paid by affected clients from the onset of the "temperature excursion".
Its mishandling of cord blood units was first made public on Nov 30, 2023, when MOH revealed that investigations were ongoing.
Seven tanks storing cord blood units were exposed to temperatures above acceptable limits.
About 2,200 cord blood units were found damaged in one of the tanks, affecting at least 2,150 clients. In April last year, it was announced that another 5,300 cord blood units in a second tank and dry shipper were deemed "non-viable".
LETTERS OF DEMAND
Some affected customers have decided to take legal action against the company.
In a separate bourse update on the matter on Thursday, Cordlife said it had received on Jul 31 a letter of demand from a law firm acting for a group of affected clients. This group is claiming damages for breach of contract and negligence.
The company added that total customer claims amount to about S$8.7 million, representing less than 10 per cent of its net asset value as of Jun 30.
Cordlife previously said it had received on Mar 28 two letters of demand from lawyers acting for two groups of affected clients.
One of the groups is claiming damages for breach of contract and negligence, while the other group is requesting compensation for costs, among other warranties and undertakings from Cordlife.
The company received its first letter of demand in May last year, while two other announcements were made on Aug 15, 2024 and Mar 1 on the same matter.
ACCREDITATION, IMPROVED FINANCIALS
Cordlife also said on Thursday it is working closely with the Association for the Advancement of Blood & Biotherapies (AABB) and the Foundation for the Accreditation of Cellular Therapy (FACT) to restore its accreditations for its Singapore operations.
In December 2023, it lost its cellular therapy accreditation with FACT. The suspension will last indefinitely, "at a minimum until FACT's investigations are completed and issues are resolved", Cordlife then said.
AABB followed suit in August last year, with the international blood bank body withdrawing Cordlife's accreditation for the collection, processing, storage and distribution of cord blood.
On its financial results for the first half of this year, the company reported revenue of S$19.4 million - more than double the S$9.2 million it earned in the same period last year.
Cordlife mainly attributed the increase in revenue to the full resumption of Singapore operations in January, after being suspended for almost nine months.
The company's gross profit also rose to S$10.9 million in the first half of 2025, up from S$1.4 million in the corresponding period a year ago.
Cordlife said it remains "cautiously optimistic" that financial performance will improve, driven by the resumption of Singapore operations, ongoing efforts at actively addressing outstanding issues and the "long-term growth potential" of the cord blood banking industry.
Said Cordlife group CEO and executive director Chen Xiaoling: 'We continue to see new business opportunities, and have been investing in our sales and marketing efforts to restore customer confidence and grow our sales pipeline back to pre-incident levels.
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